Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.

a. Complete Part 2 of Form 940 based on the following information:

Total payroll for the year $913,590

Payroll to employees in excess of $7,000 $421,930

Employer contributions into employees' 401(k) plans $23,710

Source: Internal Revenue Service

b. If the employer is located in California, which has a credit reduction of 1.5%,

what would be the amount of the credit reduction?

c. Complete Part 5 of Form 940 for the California employer given the breakdown of FUTA taxable

wages for the year to be:

First quarter $237,000

Second quarter $168,000

Third quarter $54,000

Fourth quarter $8,950

Yearly total $467,950